According to a report by the Insurance Post, Foley and Saar, who were speaking at the FT’s Global Insurance Summit, agreed that Generative AI will not be applied to underwriting or to pricing premiums.
Both pointed out that more traditional forms of AI, such as machine learning and data analytics, have been applied to underwriting for decades, but Generative AI poses unique challenges in certain pricing elements, leading Saar to say it “does not make sense” to use the technology.
Foley explained that the use of “traditional AI” is well established within AI’s retail sector, but the regulatory environment of the insurance industry restricts the chances of using Generative AI for pricing. Foley said, “If somebody is excluded from buying a product, you’re going to have to be able to explain to the regulator why that happened. We need to be very comfortable to put these things at scale, that all those guardrails are in place.”
Foley noted that there are potential benefits to be gained from implementing Generative AI, but the UK must strike a balance, “moving at scale but safely,” to maintain international competitiveness while protecting the rights of consumers. Foley also argued that people are able to identify patterns that are not picked up by AI, meaning that the approach should be led by “augmentation rather than full automation.”
Igno Van Waesverghe, Managing Partner at Aqualine Capital Partners, also appeared on the panel and argued that Generative AI “churns out” errors, meaning it could only be used in very specific scenarios.
Finally, Saar added that AI still needs to be embraced within the industry, highlighting how Zego uses it in claims processing to substantially improve speed. “For the benefit of staying alive, we have to embrace it,” he said.
